Many companies spend lots of money providing health insurance coverage to their employees. And the costs of that coverage continue to rise, in part because the girth of the American public is also rising. Overweight and obese employees cost companies money, through increased sick leave, disability claims and, of course, healthcare expenses. As a result, some companies levy additional insurance premiums for overweight and obese employees, both to encourage them to lose weight and also to cover the greater expected costs of their benefits. Are such premium hikes fair? Do they unduly stigmatize obese employees?
Consider two companies. One raises health insurance premiums for obese employees; the second offers a discount on health insurance premiums for employees who are not obese. Is the second company’s policy fairer?
On the surface, this seems like a silly question. Both companies charge overweight and obese employees more money for their health insurance than they charge other employees. But according to a recent study, many people prefer the second company’s approach to the first. They think the first company, in increasing premiums for obese employees, must think negatively about such people.
As behavioral economics has taught us: framing matters. (To read the rest of this article, please visit Forbes.)